Moka, a Chinese software startup which helps companies recruit, has closed its Rmb180 million ($26.8 million) Series B funding.
Hillhouse Capital led this round of investment, along with GGV Capital, GSR Venture and Xiang He Capital. Proceeds will be used to grow the business.
Founded in 2015, Moka is a human resources and recruitment system provider. Based around a software subscription service, the Software-as-a-Service (SaaS) company helps HR departments to post jobs on all major recruiting sites with one click.
It now serves more than 500 companies with clients that include Xiaomi, Sogou, YY Inc., McDonald’s and China Pacific Insurance Company. The company claims to cut time spent on recruitment by 40% and to save 32% of the cost.
As HR management in China evolves, Moka is targeting a more detailed and advanced approach to HR with SaaS and cloud computing services.
“Chinese companies now realise that HR departments can help to improve organisational efficiency,” said Moka's founder Zhao Oulun. “They are no longer viewed as a cost, and more companies are willing to use better software to manage them.”
HR SaaS systems have become increasingly popular with Chinese companies. Even large companies have decided to outsource their HR or recruiting systems to a professional HR system provider.
“Companies can easily find a mature third-party recruiting system with minimum effort,” said one HR expert. “The charges for outsourced recruiting software is always higher as it can provide some value-added services.”
Moka and other software providers have their sights on the SaaS market in China. It jumped to Rmb10.4 billion in 2017, as the use of cloud services was increasingly accepted by companies and it is likely to see annual growth of 39% in the next five years, according to research firm IDC.
It is among traditional enterprises in retail, manufacturing and finance that there has been a particular demand for cloud services, according to research from China Academy of Information and Communications Technology. And most of them prefer Chinese companies.
There is fierce competition among HR recruiting online services. Beisen, as one of the largest HR SaaS system providers, closed its Series E fundraising in October last year with $100 million from Sequoia, Matrix Partners China and Genesis Capital.
The Beijing-based company, which targets large labour-intensive companies, reported revenues that rose 28% to Rmb230 million last year.
Moka, on the other hand, is focused on small to medium size companies with 100 to 800 employees, and most of its clients are internet companies.
Problems do exist for HR SaaS providers as the product becomes commoditised. Some customers reckon that most HR SaaS providers are offering similar systems, and that product customisation still needs to improve. A better user experience is what Moka and its peers need to focus on for their next stage of growth.
